Financial Incentives
CCIDA
Agency Benefits
CCIDA offers a variety of types of financial assistance to project applicants including taxable and tax-exempt financing, exemptions from real estate taxes, mortgage recording taxes, and sales and use taxes. Projects benefiting from our various financial incentives include the $452 million renovation effort of the Cummins Engine Plant in Lakewood (2023) and the $30.8 million Chautauqua Harbor Hotel development project (2016).
Tax-Exempt Financing
Under the Internal Revenue Code, interest on certain revenue bonds issued by the Agency with respect to projects located in Chautauqua County are exempt from federal income taxation (“tax-exempt financing”). Tax-exempt financing provides a project beneficiary with both access to the public markets and significantly lower interest rates than those offered through traditional financing. If a project is not eligible for tax-exempt financing, the Agency can issue taxable financing for the project. Taxable revenue bonds that are sold in the public market may also result in lower interest rates and debt service payments compared to other financing options. The three most common types of tax-exempt revenue bonds issued by the Agency are Civic Facility Revenue Bonds, Small Issue Manufacturing Revenue Bonds, and Exempt Facility Revenue Bonds.
Small Issue Manufacturing Revenue Bonds
Tax-exempt Small Issue Manufacturing Revenue Bonds may be issued to finance facilities for the manufacturing or production of tangible personal property (including the processing resulting in a change in the condition of such property).
Exempt Facility Revenue Bonds
Tax-exempt Facility Revenue Bonds may be issued to finance certain facilities enumerated in Section 142 of the Internal Revenue Code, including certain airport facilities, docks and wharves, mass commuting facilities, water and sewage facilities, solid waste facilities, low-income residential rental facilities, and certain other facilities.
Industrial Development Bond – Taxable
Industrial Development Bonds are primarily for manufacturing and certain commercial projects for land, building acquisition/renovation/construction, new machinery, and equipment. The minimum bond amount is $400,000, with no upper limit. These can be used for 100% of the project, and must have public economic benefits and result in job creation.
Real Property Tax Exemption/Payment in Lieu of Tax Agreement
Sales and Use Tax Exemption
The Agency provides project beneficiaries with exemptions from state and local sales and use taxes. This exemption from state and local sales and use tax applies to items purchased in connection with the acquisition, construction, and equipping of approved projects, and generally may include construction materials, furnishings, equipment, consumables, and tool rentals. Under the Agency’s Uniform Tax Exemption Policy, this exemption from state and local sales and use taxes will terminate upon completion of the project.
Each project receiving an abatement will be subject to a Payment In Lieu of Tax Agreement (“PILOT Agreement”) in a form acceptable to the Agency. The Agency will consider project factors when determining the amounts to be paid under the PILOT Agreement. A copy of the PILOT Agreement will be forwarded to each of the affected tax jurisdictions within fifteen (15) days of execution. Unless otherwise agreed to by the Agency, with input from the affected tax jurisdictions, such payments shall be allocated among the affected tax jurisdictions in proportion to the amount of real property tax and other taxes which would have been received by each affected tax jurisdiction had the project not been made tax exempt due to the status of the Agency involved in the project.
The PILOT payment payable in the first tax year following the Completion Date of the project, and in each tax year during the Term of the PILOT, shall be an amount equal to (i) the assessed value, times (ii) the tax equalization rate of the applicable taxing jurisdiction, times (iii) the current tax rate for the applicable taxing jurisdiction, times (iv) the applicable abatement percentage.
For purposes of computing the PILOT payment, the “Term of the PILOT” shall be ten (10) full fiscal years for each taxing jurisdiction following the Completion Date of the project. In the case of Adaptive Re-Use Projects or Tourism Destination Projects, the “Term of the PILOT” shall be fifteen (15) full fiscal years for each taxing jurisdiction following the Completion Date of the project. See the Uniform Tax Exemption Policy for more information
Payment under the PILOT program must be made by the applicant to the Agency or its designee at the time or times real property taxes must be paid. Neither the PILOT Agreement nor the Agency’s involvement with the project will abate special assessments, special district taxes, or other special levies.
The Agency occasionally deviates from the Uniform Tax Exempt Policy; however, this is for special projects only. In all cases, PILOT Terms and Conditions are agreed to by the municipality’s governing body prior to the CCIDA moving ahead with offering incentives.
Mortgage Recording Tax Exemption
The Agency provides project beneficiaries with an exemption from state and local mortgage recording taxes. In Chautauqua County, the current mortgage recording tax rate is equal to $1.25 for every $100 secured by the mortgage. This exemption from state and local mortgage recording taxes enables the Agency to substantially lower the cost of financing a project with debt secured by a mortgage and/or an assignment of leases.
MORE DETAILS ABOUT OUR FINANCIAL INCENTIVES
Tax Lease/PILOT
For projects with larger capital investment resulting in significant increased assessment.
- Real Property Tax exemption on the “new assessment” due to improvements can be provided for certain types of projects/business sectors
- 8% Sales Tax Exemption generally on items with useful life greater than 1 year, and also potentially on rental equipment. Approval required in advance, not reimbursable
- 25% Mortgage Recording Tax exemption
- Application and all supporting exhibits/documentation due on or before 1st of the month
- $2,000 Application Fee/Counsel Deposit
- IDA Fee is 1% of the Project Total
- IDA Counsel Fee depends on work performed
- It’s a more involved process, but provides the greatest incentive. Processing generally takes two months, sometimes longer, due to various legal requirements
- For more information, review our Uniform Tax Exemption Policy and Guidelines provided above.
LEAD
For smaller projects we facilitate the CCIDA LEAD program for Sales Tax Exemption only, and connect clients to the local Assessor for additional potential Real Property Tax exemptions.
- Application and all supporting exhibits/documentation due on or before 1st of month
- $250 Application Fee
- $1,500 IDA Fee
- $850 IDA Counsel Fee
- Processing typically within one month.
CCIDA Loans
Uses may be for reimbursement of Acquisition, Construction/Renovation and Equipment, and also for Working Capital AL Tech RLF, EDA CARES Act Funds, and/or Chautauqua Revolving Loan Fund (CRLF) are all administered locally by CCIDA
- “Take-out” lending (reimbursement basis)
- Bridge funding needed (cash or bank bridge loan)
- 00% A.P.R. Fixed and Fully Amortized
- Terms ranging 5-20 years
- Includes 1.25% Mortgage Recording Tax Exemption, where applicable
- Application and all supporting exhibits/documentation including the Environmental Assessment Form are due on or before 1st of the month
- $250 Application Fee
- IDA Fee 1% of Loan Amount
- IDA Counsel Fee dependent on type of loan and work performed
- Processing typically within one month.
In addition to our financial incentives, CCIDA also offers a variety of Loan Programs to assist local businesses.